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Boyarchenko, Svetlana - EconWPA - 2005

The goal of the paper is to study how a menu of options affects decisions of a rational agent facing uncertainty over …

Persistent link: https://www.econbiz.de/10005550882

Zhang, Paolo Laureti Yi-Cheng - EconWPA - 2003

We analyze different ways of pairing agents in a bipartite matching problem, with regard to its scaling properties and to the distribution of individual ``satisfactions''. Then we explore the role of partial information and bounded rationality in a generalized {\it Marriage Problem}, comparing...

Persistent link: https://www.econbiz.de/10005062392

A Framework for Studying Economic Interactions (with applications to corruption and business cycles)

Verbrugge, Randal J. - EconWPA - 1998

Most economic models implicitly or explicitly assume that interactions between economic agents are 'global' - in other words, each agent interacts in a uniform manner with every other agent. However, localized interactions between microeconomic agents are a pervasive feature of reality. What are...

Persistent link: https://www.econbiz.de/10005407546

Comparative Statics with Never Increasing Correspondences

Roy, Sunanda; Sabarwal, Tarun - EconWPA - 2005

This paper studies models where the correspondences (or functions) under consideration are never increasing (or weakly decreasing) in endogenous variables, and weakly increasing in exogenous parameters. Such models include games of strategic substitutes, and include cases where additionally,...

Persistent link: https://www.econbiz.de/10005407559

Cooperative equilibria in the finite iterated prisoner's dilemma

Nemoto, Kae; Gagen, Michael J - EconWPA - 2004

Nash equilibria are defined using uncorrelated behavioural or mixed joint probability distributions effectively assuming that players of bounded rationality must discard information to locate equilibria. We propose instead that rational players will use all the information available in...

Persistent link: https://www.econbiz.de/10005118613

Optimal Experimentation in a Changing Environment

Keller, Godfrey; Rady, Sven - EconWPA - 1998

This paper studies optimal experimentation by a monopolist who faces an unknown demand curve subject to random changes, and who maximises profits over an infinite horizon in continuous time. We show that there are two qualitatively very different regimes, determined by the discount rate and the...

Persistent link: https://www.econbiz.de/10005118645

Optimal Annual Contributions to Flexible Spending Accounts: A Rule-of-Thumb

Cuddington, John T. - EconWPA - 1998

This note argues that many employees under-contribute to so-called flexible spending accounts. A simple rule-of-thumb is developed for making optimal contributions (for risk neutral employees): After-tax income net of (uncertain) medical expenditures will be maximized if you contribute to your...

Persistent link: https://www.econbiz.de/10005062372

INTERNATIONAL EXPANSION THROUGH SEQUENTIAL INVESTMENT: THE EFFECTS OF NATIONAL CULTURE ON BUYOUTS AND DISSOLUTIONS IN BIOTECHNOLOGY PARTNERSHIPS

FOLTA, TIMOTHY B.; FERRIER, WALTER J. - EconWPA - 1997

This study examines the role of national culture on an issue which is central to competitive strategy: whether to maintain flexibility or commit to a strategic direction. We consider that equity investments in foreign partners may be initiated as the first step in a sequential acquisition...

Persistent link: https://www.econbiz.de/10005062391

Learning versus Diversification in Project Choice

Subramanian, Narayanan; Menon, Nidhiya - EconWPA - 2004

We study the issue of project choice when a risk-averse agent must choose whether to invest in two projects of the same type (focus) or of different types (diversification). Projects of the same type are subject to common type-specific shocks. Hence focusing is more risky within each period, but...

Persistent link: https://www.econbiz.de/10005407512

Policy Uncertainty and Long-Run Investment and Output across Countries

Jeong, Byeongju - EconWPA - 2001

I explore how and and to what extent policy uncertainty can account for the observed long-run cross-country differences …-related investment cost is uncertain. Holding the average one-period investment cost constant, policy uncertainty leads to a higher … capital price and subsequently to lower levels of long-run aggregate investment and output. Policy uncertainty also makes …

Persistent link: https://www.econbiz.de/10005407527